2005 Legislation
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HOUSE BILL NO. 194 – MV dealer license, insurance

HOUSE BILL NO. 194

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Bill Status



H0194.........................................by TRANSPORTATION AND DEFENSE
MOTOR VEHICLE DEALER - LICENSE - Adds to and amends existing law relating
to licensing of motor vehicle and vessel dealers and manufacturers to
require a certificate of insurance as a condition of licensure or renewal
of a license; to provide for suspension of a dealer's or manufacturer's
license for failure to maintain a principal place of business; and to
provide for assessment of a reinstatement fee prior to reissuing a
previously suspended license.
                                                                        
02/11    House intro - 1st rdg - to printing
02/14    Rpt prt - to Transp

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 194
                                                                        
                          BY TRANSPORTATION AND DEFENSE COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO LICENSING OF MOTOR VEHICLE DEALERS AND SALESMEN; AMENDING  SECTION
  3        49-1607,  IDAHO  CODE,  TO  PROVIDE FOR ASSESSMENT OF A REINSTATEMENT FEE;
  4        AMENDING SECTION 49-1608, IDAHO CODE, TO REQUIRE PAYMENT OF  A  REINSTATE-
  5        MENT FEE AND TO MAKE TECHNICAL CORRECTIONS; AMENDING CHAPTER 16, TITLE 49,
  6        IDAHO  CODE,  BY  THE  ADDITION  OF A NEW SECTION 49-1608A, IDAHO CODE, TO
  7        REQUIRE A CERTIFICATE OF INSURANCE AS A CONDITION OF OBTAINING OR RENEWING
  8        A VEHICLE OR VESSEL DEALER'S OR MANUFACTURER'S  LICENSE,  TO  PROVIDE  FOR
  9        FILING  A CERTIFICATE WITH THE IDAHO TRANSPORTATION DEPARTMENT AND TO PRO-
 10        VIDE FOR REINSTATEMENT OF A LICENSE  SUSPENDED  FOR  FAILURE  TO  MAINTAIN
 11        INSURANCE;  AND  AMENDING SECTION 49-1612, IDAHO CODE, TO PROVIDE FOR SUS-
 12        PENSION OF A DEALER'S OR MANUFACTURER'S LICENSE FOR FAILURE TO MAINTAIN  A
 13        PRINCIPAL  PLACE  OF BUSINESS, TO PROVIDE FOR APPEAL OF THE SUSPENSION, TO
 14        REQUIRE PAYMENT OF A REINSTATEMENT FEE, TO PROVIDE PROPER TERMINOLOGY  AND
 15        TO MAKE A TECHNICAL CORRECTION.
                                                                        
 16    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 17        SECTION  1.  That  Section 49-1607, Idaho Code, be, and the same is hereby
 18    amended to read as follows:
                                                                        
 19        49-1607.  FEES -- FUNDS -- EXPENSES -- EXPIRATION  OF  LICENSES.  (1)  The
 20    department  shall  collect  with each application for licensure, the following
 21    fees:
 22        (a)  Dealer's, wholesale dealer's and vehicle manufacturer's license, ini-
 23        tial application, one hundred  twenty-five  dollars  ($125),  ten  dollars
 24        ($10.00)  of  which shall be deposited in the county current expense fund.
 25        Renewal application, one hundred dollars ($100).
 26        (b)  Vehicle salesman's license, twenty-five dollars ($25.00), ten dollars
 27        ($10.00) of which shall be deposited in the county current expense fund.
 28        (c)  Distributor-factory branch-distributor branch  license,  one  hundred
 29        dollars ($100).
 30        (d)  Representative's license, twenty-five dollars ($25.00).
 31        (e)  To  reissue  a  license,  salesman and dealer identification cards or
 32        other licensing documents at a dealer's request,  not  resulting  from  an
 33        error by the department, a fee of ten dollars ($10.00) per document.
 34        (f)  Supplemental  lot  license  or relocated principal place of business,
 35        and temporary supplemental lot, twenty-five dollars ($25.00)  for  license
 36        issued  to  a single dealer. A fee of fifty dollars ($50.00) for a license
 37        issued to a group of dealers for a temporary supplemental lot.
 38        (g)  Reinstatement fee, five hundred dollars ($500). Reinstatement fee  is
 39        due  prior  to  reinstatement or renewal of any license issued pursuant to
 40        this chapter which was previously suspended, revoked or canceled.
 41        (2)  All fees shall be paid over to the state treasurer for credit to  the
 42    state  highway  account out of which shall be paid the expenses of the depart-
 43    ment and the expenses incurred in enforcing the provisions of this chapter.
                                                                        
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  1        (3)  Dealer licenses, if not suspended or revoked,  may  be  renewed  from
  2    year  to year upon the payment of the fees specified in this section to accom-
  3    pany applications, and renewals shall be made in accordance  with  the  provi-
  4    sions of section 49-1634, Idaho Code.
  5        (a)  There  shall  be twelve (12) licensing periods, starting with January
  6        and ending in December. A dealer's license shall be  in  effect  from  the
  7        month of initial licensing  through the last day of the next year's calen-
  8        dar month that precedes the month of the initial licensing.
  9        (b)  Any  renewal  license application received or postmarked after thirty
 10        (30) days from the end of the previous  year's  license  period  shall  be
 11        processed as an initial application and initial fees shall be paid.
 12        (4)  Salesman  licenses,  if  not suspended or revoked, shall be valid for
 13    three (3) years from the date of issue provided that:
 14        (a)  Employment remains with the sponsoring dealership; and
 15        (b)  The sponsoring dealership has a valid license issued by  the  depart-
 16        ment.
 17    Renewals shall be issued in accordance with the provisions of section 49-1635,
 18    Idaho Code.
                                                                        
 19        SECTION  2.  That  Section 49-1608, Idaho Code, be, and the same is hereby
 20    amended to read as follows:
                                                                        
 21        49-1608.  LICENSE BOND. (1) Before any dealer's license shall be issued by
 22    the department to any applicant, the applicant shall procure and file with the
 23    department good and sufficient bond in the amount shown, conditioned that  the
 24    applicant  shall not practice any fraud, make any fraudulent representation or
 25    violate any of the provisions of this chapter, rules and  regulations  of  the
 26    department,  or provisions of chapter 5, title 49, section 49-1418, or chapter
 27    6, title 48, Idaho Code, or federal motor vehicle safety standards, or  odome-
 28    ter fraud in the conduct of the business for which he is licensed.
 29        (a)  All  dealers, including wholesale, but excluding a dealer exclusively
 30        in the business of motorcycles and motor  scooters,  all-terrain  vehicles
 31        and snow machine sales, twenty thousand dollars ($20,000).
 32        (b)  A  dealer exclusively in the business of motorcycle and motor scooter
 33        sales, all-terrain vehicles and snow machine sales, ten  thousand  dollars
 34        ($10,000).
 35        (2)  The  bond  required in this section may be continuous in form and the
 36    total aggregate liability on the bond shall be limited to the payment  of  the
 37    amounts set forth in this section. The bond shall be in the following form:
 38        (a)  A  corporate surety bond, by a surety licensed to do business in this
 39        state; or
 40        (b)  A certificate of deposit, in a form prescribed by the director; or
 41        (c)  A cash deposit with the director.
 42        (3)  If a bond is cancelled canceled or otherwise  becomes  invalid,  upon
 43    receiving notice of the cancellation or invalidity, the department shall imme-
 44    diately  suspend  the  dealer's  license  and  take  possession of the license
 45    itself, all vehicle plates used in the business and all unused title  applica-
 46    tions  of  the  licensee. The licensee is entitled to a hearing which shall be
 47    held within twenty (20) days of the suspension. Upon receiving notice  that  a
 48    valid  bond  is  in  force,  the  department  shall  immediately reinstate the
 49    license, upon payment of the reinstatement fee as required pursuant to section
 50    49-1607, Idaho Code.
 51        (4)  The bond requirements of this  section  shall  be  satisfied  if  the
 52    applicant is a duly licensed manufactured home dealer in accordance with chap-
 53    ter  21, title 44, Idaho Code, and the bond required by section 44-2103, Idaho
                                                                        
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  1    Code, otherwise meets the requirements of this section. The amount of the bond
  2    shall be in the amount as required in this section or that required in section
  3    44-2103, Idaho Code, whichever is greater. The applicant shall furnish a  cer-
  4    tified  copy  of  the  bond as required in section 44-2103, Idaho Code, to the
  5    department.
                                                                        
  6        SECTION 3.  That Chapter 16, Title 49, Idaho Code, be,  and  the  same  is
  7    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
  8    ignated as Section 49-1608A, Idaho Code, and to read as follows:
                                                                        
  9        49-1608A.  CERTIFICATE OF INSURANCE. (1) A  certificate  of  insurance  is
 10    required  prior  to  issuance  or renewal of any vehicle or vessel dealer's or
 11    manufacturer's license issued pursuant to this chapter. The certificate shall:
 12        (a)  Be issued by an insurance carrier licensed to do business within this
 13        state;
 14        (b)  Verify that the insured person is covered by a policy that  provides,
 15        at  a  minimum,  the  limits of coverage as required under section 49-117,
 16        Idaho Code, relating to proof of financial responsibility;
 17        (c)  Verify that the insured person is covered by a policy  that  provides
 18        for payment of judgments as required in section 49-1206, Idaho Code;
 19        (d)  Verify  that the insured person's policy covers all vehicles manufac-
 20        tured, owned, operated, used or maintained by or under the control of  the
 21        insured;
 22        (e)  Verify that the insured person's policy covers all other persons who,
 23        with  the  consent  of  the insured, use or operate vehicles manufactured,
 24        owned or maintained by or under the control of the insured person.
 25        (f)  Be dated as of the date of the motor vehicle policy for which  it  is
 26        given;
 27        (g)  Contain the policy number; and
 28        (h)  Contain  a  provision  requiring  that  the  insurer shall notify the
 29        department in writing of any cancellation  of  the  policy  and  that  the
 30        insurer  shall continue to be liable under the policy until the department
 31        receives the notice or  until  the  cancellation  date  specified  in  the
 32        notice, whichever occurs later.
 33        (2)  The  written  certificate  of  insurance  shall  be filed upon a form
 34    approved by the department and shall be held by the department.
 35        (3)  If a certificate  of  insurance  is  canceled  or  otherwise  becomes
 36    invalid,  upon receiving notice of the cancellation or invalidity, the depart-
 37    ment shall immediately suspend the license and take physical possession of the
 38    license, all vehicle plates used in the business and all unused title applica-
 39    tions of the licensee. The licensee is entitled to a hearing  which  shall  be
 40    held within twenty (20) days of the suspension. Upon receiving a valid certif-
 41    icate  of insurance and payment of the reinstatement fee, the department shall
 42    immediately reinstate the license.
 43        (4)  The provisions of this section are supplemental to and shall  not  be
 44    construed to alter or affect the provisions of section 49-1212, Idaho Code.
                                                                        
 45        SECTION  4.  That  Section 49-1612, Idaho Code, be, and the same is hereby
 46    amended to read as follows:
                                                                        
 47        49-1612.  NOTICE OF CHANGE OF ADDRESS. (1) The department shall not  issue
 48    a  dealer's  or  manufacturer's  license  to any applicant who does not have a
 49    principal place of business.
 50        (2)  Should the dealer or manufacturer change the site or location of  his
 51    principal  place  of  business,  he  shall  immediately upon making the change
                                                                        
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  1    notify the department, and a new license shall be granted  for  the  unexpired
  2    portion  of  the term of the license, providing the new location meets all the
  3    requirements for a principal place of business.
  4        (3)  Should a dealer or manufacturer cease to be in possession of a  prin-
  5    cipal  place  of business from and on which he conducts the business for which
  6    he is licensed, he the dealer's or manufacturer's license shall be  suspended.
  7    The  licensee shall have twenty (20) days to appeal the suspension as provided
  8    in section 49-1618, Idaho Code.
  9        (4)  The dealer or manufacturer shall immediately  notify  the  department
 10    and upon demand by the department shall deliver the dealer's or manufacturer's
 11    license,  which shall be held and retained until it shall be made to appear to
 12    the department that the licensee has again come into possession of a principal
 13    place of business, whereupon the dealer's  or  manufacturer's  license  shall,
 14    upon payment of the reinstatement fee, be reissued to him, without charge.
 15        (5)  Nothing  in the provisions of this chapter shall be construed to pre-
 16    vent a dealer or manufacturer from  conducting  the  business  for  which  the
 17    dealer  or  manufacturer  is licensed at one (1) or more licensed supplemental
 18    lots or locations not contiguous to the dealer's or  manufacturer's  principal
 19    place of business but operated and maintained in conjunction with it.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                            RS 14817C1

The purpose of this legislation is to require that licensed motor
vehicle dealers provide the Idaho Transportation Department with a
verification of existence of a business liability insurance policy for
motor vehicle dealers.  The legislation outlines the requirements of
such a policy which are similar to the requirements of dealer bonds. 
The legislation is intended to protect the public from small vehicle
dealers with minimal assets who fail to have the required liability
insurance, as specified in Idaho Code 49-1230 and 49-117, in case of
an accident.  The legislation also initiates a reinstatement fee to
renew or reinstate licenses for motor vehicle dealers who have had
their licenses revoked, cancelled, or suspended.  This will help
alleviate some of the costs incurred to the Idaho Transportation
Department when canceling, then shortly thereafter reinstating, the
vehicle dealers licenses.


                            FISCAL NOTE

One full time PCN at $35,000 annually
Capital money for PCN (one time) $5,000
Programming (one time) approximately $8,500
Revenue is estimated at 200 reinstatements annually at $500 for
approximately $100,000 in revenue.



Contact
Name:  Rep. Bob Nonini 
Phone: 332-1000
Name:  China Veldhouse, Independent Auto Dealers Assoc. 
Phone: 724-3047


STATEMENT OF PURPOSE/FISCAL NOTE                     H 194